Auto Market Lighting Up But Sparkle Missing

Vehicle sales in India continued their gradual climb-up encountering a few bumps here and there during the month of September 2014, suggesting that while the auto market is slowly moving up the growth curve, a full-blown recovery is some distance away. A cause of comfort was that all segments of the auto market recorded positive growth during the month – a phenomenon unheard in the Indian automotive space for over two years. Domestic sales across vehicle categories grew by a healthy 20.4% y-o-y in September 2014, helped by robust two-wheeler numbers.

Passenger Vehicles

Domestic sales of passenger vehicles at 223,568 units in September 2014 stayed on course, somewhat shakily though. The segment clocked a modest growth of 3.3% y-o-y, riding on positive sentiment and excitement created by new launches. However, passenger cars that had started moving up the sales charts since May 2014 after a prolonged slump, hit a speed-breaker with domestic sales declining by 1.0% y-o-y to 154,882 units during the month.

Domestic sales of Maruti Suzuki India Ltd (MSIL) during the month of September 2014 stood at 99,290 units, up 9.8% from 90,399 units in September last year. The company's sales were driven by its compact cars, comprising Swift, Estilo, Celerio, Ritz and Dzire, which clocked 43,304 units as against 36,679 units in the year-ago month, growing by18.1%. Sales of mini passenger cars including Alto, A-Star and WagonR were down 13.4% to 35,547 units from 41,061 units in the same month previous year.

Rival Hyundai Motor India Ltd (HMIL) sold 35,041 units in the domestic market during September 2014 as compared to 30,601 units in September 2013, registering a 14.5% uptick. The company’s exports at 16,430 units, however, remained in a deceleration mode, falling by 21.1% year-on-year.

Commenting on the September sales, Rakesh Srivastava, Sr VP - Sales and Marketing, HMIL said, “Hyundai volumes have grown by 14.5% for September and 12.8% for first half of the year with strong performance of new models lead by 8,902 units of new Elite i20. In this festive season, we are seeing a significant increase in the first time buyers and exchange buyers, which is very encouraging, as it will accelerate the positive momentum already being experienced in the last few months.”

Honda Cars India Ltd (HCIL) was the pick of passenger vehicle players in India, registering a growth of 45% in domestic sales to 15,015 units in September 2014 from 10,354 units in the corresponding month last year. 

Model wise domestic sales break-up for HCIL during September 2014 read as follows: Brio - 1,152 units; Amaze - 3,848 units; Mobilio - 5,329 units; City - 4,600 units; and CR-V - 86 units.

HCIL also exported a total volume of 380 units during September 2014. 

Maintaining strong sales momentum during H1 of the FY 2014-15, HCIL has clocked an overall growth of 47.9% during the period Apr-Sep’14 with 88,200 units as against 59,617 units during the corresponding period last year. 

Jnaneswar Sen, Sr Vice President – Marketing & Sales, HCIL, said, “We continue to perform strongly with strong demand for all our models during this festival period.” “Our top performer Honda City successfully resumed its production during September 2014 and in coming months, we will be able to ensure better availability and timely deliveries to fulfill the huge demand,” he added. 

Other Japanese car players, namely, Toyota Kirolskar Motor and Nissan Motor India also came up with decent sales performance.

Toyota Kirloskar Motor (TKM) sold 12,552 units in September 2014 in the domestic market as compared to 12,015 units in September 2013, thereby registering a 4.5% growth. The company exported 1,500 units of Etios series in September 2014. With a total sales volume of 14,054 units, including exports, in September 2014, as compared to 15,797 units a year ago, TKM, however, slipped into the negative terrain with a 11.0% decline. 

N Raja, Director and Sr VP, Sales and Marketing, TKM, said “We have registered growth this month. The industry is beginning to gradually turn around. Positive market sentiments combined with the festive season is expected to boost sales in the coming months as well.”

Nissan Motor India, on the other hand, witnessed a whopping 76.4% upswing (albeit on a small base) in its domestic sales that stood at 4,145 units in September 2014. The company’s exports at 15,063 units were in overdrive, soaring by 38.4% y-o-y.

Home grown player, Mahindra & Mahindra (M&M) saw its passenger vehicle sales in domestic market increase by 5.2% to 19,893 units during September 2014 from 18,916 units a year ago.

Pravin Shah, Chief Executive, Automotive Division & Intl. Operations (AFS), M&M, said, "The sales numbers for September have been encouraging and we are glad that the automotive industry is turning the bend. We expect the ensuing festive season to bring in some much needed cheer with a slew of new launches from manufacturers as well as a reduction in the Current Account Deficit and stable fuel prices. At Mahindra, we are very happy with the positive growth, especially in our stronghold segments of UVs and Pick Ups which have grown by 9% and 30%, respectively.”

Passenger vehicles sales of Tata Motors in the Indian market remained in negative territory, declining by 4.7% y-o-y to 11,869 units during the month.

Ford India, after its decent run after the introduction of compact SUV – EcoSport, is running out of the steam. Ford India's domestic sales declined 36.2 % to 6,786 units in September 2014 from 10,640 units in the same month previous year. The exports were, however, in the fast lane, leapfrogging by a handsome 95.3% y-o-y to 6,956 units during the month.

General Motors India (GMI) was stuck in the rut, with 39.4% decline in September sales at 4,270 units vis-a-vis 7,048 units sold in the same month last year.

Commercial Vehicles

Commercial vehicles staged a recovery of sort with a 8.6% year-on-year growth in domestic sales during the month of September 2014. The positive sales growth came as refreshing change for the beleaguered segment that has reeled under the severe slowdown for over two years.

Ashok Leyland posted an impressive 25.1% rise in its domestic sales to 8,025 units in September 2014 from 6,414 units a year earlier.

Volvo Eicher Commercial Vehicles clocked domestic sales of 2,781 units in September 2014, which represented a 17.8% growth y-o-y.

Commercial vehicle sales of Tata Motors at 29,004 units in domestic market during September 2014 remained in reverse gear, falling by 13.4% from 33,498 units a year ago.

Mahindra & Mahindra (M&M) notched up 16.1% increase in CV sales in the local market during September 2014, which aggregated 15,171 units  as against 13,068 units in September last year.

Two-Wheelers

Two-wheelers, sustaining the buoyancy, stayed on fast track with a spectacular y-o-y growth of 23.6% during the month.

The market leader Hero MotoCorp posted impressive sales figures, witnessing a healthy 27.4% growth in domestic sales that added up to 580,882 units during the month of September 2014. With exports growing by 78.9%, the company’s total sales standing at 604,052 units grew by 28.9% y-o-y during the month.

Catching up fast with the market leader, Honda Motorcycle & Scooter India (HMSI) reported 33.3% growth in sales (domestic + exports) that added up to 438,500 units in September 2014, as against at 328,922 units in the same month last year.

Yamaha Motor India witnessed a 26.8% increase in domestic two-wheeler sales at 59,325 units in September 2014, as compared to 46,790 units a year ago.

Domestic two-wheeler sales of Chennai-based TVS Motor grew by a respectable 29% to 217,447 units in September 2014 from 168,598 units in September last year.

Bajaj Auto was an exception among two-wheeler majors in the Indian market, witnessing a 1.5% fall in its domestic sales in September 2014. However, the company’s two-wheeler exports rising by healthy 21.5% y-o-y enabled Bajaj Auto to post a 7.1% growth in total sales that stood at 347,010 units in September 2014 compared with 323,879 units a year back.

Auto market is crawling back to the positive territory, as sequential growth in sales numbers since the advent of current financial year indicates. However, uncertainty still persists, keeping everybody guessing and hoping. The good news is that commercial vehicles have reversed the negative trends prevailing for over two years, giving rise to optimism that auto market will be driving on fast track sooner than later.

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